BANGKOK (Reuters) - A Thai anti-corruption agency is investigating the suspected misappropriation of up to 85 percent of money from a state fund for the poor in a new scandal to hit the military government, which has promised to clean up graft.

The Office of Public Sector Anti-Corruption Commission (PACC) said on Tuesday it had found evidence of irregularities amounting to about 100 million baht ($3.2 million).

"We have found that there are corrupt practices involving money destined for low-income people which the state allocates every year," Korntip Daroj, secretary-general of the Office of Public Sector Anti-Corruption Commission (PACC), told Reuters.

"We have investigated and found corruption-related instances and evidence in about 49 out of 76 provinces."

The funds, which are given directly to those deemed in need in grants of up to 3,000 baht ($100), are disbursed through the Social Development and Human Security Ministry. Reuters was unable to reach officials at the ministry for comment.

Prime Minister Prayuth Chan-ocha, who heads the junta that seized power in 2014, said he had ordered the dismissal of all those involved in misappropriating funds and called for an investigation by the ministry.

Prayuth told reporters after a cabinet meeting that the government had always been stringent about corruption.

"I don't want you to think that it has become worse," he said.

The latest investigation comes as Prayuth's deputy, Prawit Wongsuwan, is under investigation for failing to declare among his assets a collection of luxury watches.

That has partly fueled recent protests calling for an end to military rule, with elections set for February 2019 after repeated delays.

The junta took power in the name of ridding Thailand of corruption as well as ending a decade-long political deadlock between rival factions, but government critics say it has failed to tackle a culture of impunity for the rich and powerful.

Korntip said the fraud over the fund for the poor was allegedly committed by faking copies of national identification cards. It was later found that money never reached the intended recipients, he said.